California State Tax Archives - Page 10 of 10

Tips for Franchise Tax Board Audits

July 5, 2026December 27, 2013 by Brotman Law

In my previous article on the Franchise Tax Board audit, I talked about the importance of pre-auditing the tax return in question in order to identify any issues before your first meeting with the Franchise Tax Board auditor. In this article, I will discuss another advantage of pre-auditing a return, the importance of the presentation of records in general, and the importance of your relationship with the auditor in order to gain successful outcomes in Franchise Tax Board audits.

Key Takeaways

Pre-auditing the return also has the added advantage of getting all your books and records organized and ready for the auditor prior to the audit. Appearances are very important in Franchise Tax Board audits as it helps to set the tone of an audit.
Speaking of good relationships, it is always important to keep the golden rule of Franchise Tax Board audits in mind: you win always win more flies with honey than with vinegar during the course of an audit.
I hope this series of articles has been helpful in providing you with some perspective on Franchise Tax Board audits. If you have any questions or if I can further assist you, please contact me directly via the information contained on this website.

Franchise Tax Board Audit Tips

July 5, 2026December 27, 2013 by Brotman Law

Throughout my years of practice, I have developed a few helpful tips for dealing with a Franchise Tax Board audit and auditors from the state of California. Franchise Tax Board audits are not nearly as common these days. Most of my clients who receive contact from the Franchise Tax Board are contacted after they are subject to an IRS audit and merely sent a bill based on the adjustment in taxable income that the IRS has already calculated. In other words, they let the IRS do all the hard work and send a supplemental bill later on. However, I hope that these few helpful tips will guide you in your dealings with the Franchise Tax Board. For more information on California state tax matters, please visit the Franchise Tax Board attorney services section of my website.

Key Takeaways

Throughout my years of practice, I have developed a few helpful tips for dealing with a Franchise Tax Board audit and auditors from the state of California. Franchise Tax Board audits are not nearly as common these days.
Keep in mind that the purpose of a Franchise Tax Board audit is to “effectively and efficiently determine the correct amount of tax based on an analysis of relevant tax statutes, regulations, and case law as applied to the taxpayer’s facts”.
Next, it is important to control the flow of information and how that information is communicated to the Franchise Tax Board.

Sales Tax Audit: An Overview

May 25, 2026December 1, 2013 by Brotman Law

An Overview of a Sales Tax Audit

A sales tax audit has key differences from a regular audit. First, the scope of the audit looks at a business’s gross receipts and various ways of measuring gross receipts. The businesses that are most frequently subject to sales tax audit include bars, restaurants, retail stores, manufacturers, wholesalers, services businesses that sell goods, and a variety of others.

Key Takeaways

A sales tax audit has key differences from a regular audit. First, the scope of the audit looks at a business’s gross receipts and various ways of measuring gross receipts.
Throughout their years of practice, sales tax auditors have developed ways of determining gross receipts that are innovative and industry specific.
The Board of Equalization sometimes feels that these methods are more telling than a standard gross receipts test.

Throughout their years of practice, sales tax auditors have developed ways of determining gross receipts that are innovative and industry specific. For example, if the business audited were a coin-operated laundromat, the Board of Equalization may measure water consumption levels for the business against the number of washing machines it has. Pour tests are common for restaurant and bars (the amount of alcohol used to make each drink) and inventory audits are common for other types of businesses.